Trillion-Dollar Taxpayer


When America’s biggest corporations make news for their taxes, it's usually for how little they pay. One recent study, for example, argues that 26 big corporations, including AT&T, Boeing, and Citigroup, paid their CEOs more than they paid in federal income tax. Now, another corporate giant is making headlines for its taxes. But for once, the news involves how much it paid, not how little.

Exxon and Mobil are iconic corporate names. Both began life as parts of John D. Rockefeller’s original Standard Oil Company and were spun off in 1911 when the U.S. Supreme Court found Standard Oil guilty of illegally monopolizing the oil refining industry. “Standard Oil Company of New Jersey” eventually grew into Exxon, while “Standard Oil Company of New York” morphed into Mobil. When the two giants re–joined to create Exxon Mobil in 1999, they instantly became the biggest publicly–traded corporation on earth. Since then, they’ve only gotten bigger, with a market capitalization (total value of outstanding publicly–traded shares) topped only by tech giants Apple and Microsoft, and have become the largest company on earth by revenue.

You would expect a corporation this size to pay a lot in taxes, and in fact, a recent study by economist Mark Perry reveals that Exxon Mobil has paid over one trillion dollars in taxes since the 1999 merger. That’s a full three times the profit the company earned for its actual shareholders.

In 2008, Exxon Mobil’s profit reached a staggering $46.87 billion, but they also paid $36.53 billion in income taxes, $34.51 billion in excise taxes, and $41.72 billion in other taxes, including sales taxes. That totals $112.76 billion - $9.4 billion per month, $2.17 billion per week, $309 million per day, and $214,535 per minute.

While skeptics point out that Exxon Mobil may not actually pay all those taxes out of its own pocket (they would argue that the corporation just passes the cost of excise taxes on to customers and merely collects sales taxes imposed by state and local governments on buyers), there’s no arguing that the economic activity generated by this particular company ultimately led to that trillion dollars in worldwide tax revenue.

While we’re not here to champion “Big Oil” in general, or Exxon Mobil in particular, it is surprising to learn just how much they pay in taxes. Taxes can often be surprising, as there is nothing cut and dry about them! You may be surprised by some of the deductions you or your business can and cannot take.